CWY v. CY (formerly known as CY)

FCMC 106 / 2018

[2019] HKFC 131

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

MATRIMONIAL CAUSES

NUMBER 106 OF 2018

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RULING
(Costs following a compromise on a defended suit)

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Introduction

1.  On the 26 March 2019 this matter returned to court for a First Appointment hearing. On that occasion it became clear that the parties had still not resolved the issue of the suit, which remained defended. On the 4 January 2018 the Petitioner husband had originally filed a petition based on the wife’s unreasonable behaviour and on the 28 February 2018 the Respondent wife had countered by filing an Answer denying the same and also filing a cross petition based on the husband’s unreasonable behavior. Sensibly the parties finally reached consensus on the 26 March 2019 and agreed to proceed on the basis of one-year separation with consent. It is of note that it was also agreed that the parties had infact been separated since December 2016 – i.e. for over one year as at the date of both the petition and cross petition. Unfortunately, the parties could not agree on the issue of costs and it was directed that this matter be dealt with by way of a paper disposal.

2.  I should add at this point that generally speaking defended suits are not encouraged by the courts. Thus parties are routinely told early on, that there will be cost consequences in the event that one or other of the parties is deemed to be unreasonable in this regard.  

The law

3.  The relevant law is not in dispute and can be found at Order 62 RHC on costs. To summarize it is accepted that the issue of costs lies in the discretion of the court and that costs are normally expected to follow the event.  This presumption is more easily displaced in family proceedings than in others. In exercising the courts discretion reference can also be made to a number of factors as set out in Order 62 r 5 including inter alia any without prejudice save as to costs letters and the litigation conduct of the parties.

Each party’s respective positions on costs

4.  In the husband’s written submission, he asks that there be no order as to costs whereas the wife asks that the husband do pay her costs.

Discussion  

5.  Having now read the parties submissions and their correspondence bundles, including some without prejudice correspondence, it seems to me that the litigation conduct of both parties has been somewhat questionable at times. For example, neither party raised the possibility of proceeding on the basis of one-year separation with consent at the beginning of the litigation. The husband wrote to the wife’s solicitor on the 27 December 2017 and asked, at the end of that letter, if the solicitors had instructions to accept service of the petition. There was no discussion about the grounds for the divorce; I certainly do not accept the suggestion that the onus was on the wife to raise this as a possibility and that in the absence of that the husband had no option but to then proceed on the basis of an unreasonable behaviour petition. This is clearly not correct.

6.  Similarly I do not accept the suggestion that the wife had no alternative but to cross petition on the basis of unreasonable behaviour. It was open to both sides to try to resolve the issue of the suit on a more amicable basis – but they each chose not to do so.

7.  It is true that the husband’s side first suggested a more conciliatory approach when, on the 15 March 2018, they wrote a without prejudice save as to costs letter suggesting that the matter proceed on the basis of one-year separation with consent with no order as to costs. Follow up letters were written and on the 6 April 2018 a consent summons was sent to the wife’s solicitors in standard terms. It seems that this was initially accepted by the wife but that she subsequently had second thoughts. It is suggested by the solicitors for the wife that this was because they thought that it was important that issues pertaining to the child be dealt with in the petition. For the avoidance of doubt this is not accepted. It is, in my view, NEVER appropriate to argue issues concerning a child or indeed finances in the body of the suit. This was wholly inappropriate. Indeed, this was also reiterated by the Legal Aid Department in their letter to the wife’s solicitors on the 30 April 2018 when they said inter alia as follows:

“It appears that the proposal of concluding the main suit with the fact of one year’s separation by consent shall not prejudice the aided person’s right to raise all the disputed facts and issues in the Child Dispute Resolution. Please reconsider if the case shall move on to deal with custody of the child and the ancillary relief claims.”

8.  Subsequently the wife’s solicitors wrote to the husband’s solicitor on the 23 May 2018, 5 June 2018 and the 14 June 2018 confirming that they were willing to proceed on the basis of one-year separation with consent. It was then the turn of the husband’s side not to respond and the husband subsequently changed his solicitors. Letters were then sent to the husband’s new solicitors on the 5 July 2018 and 7 August 2018 – but again no substantive reply was received on the issue of the suit or generally.

9.  On the 15 August 2018 the wife’s solicitors wrote a general without prejudice letter proposing a global settlement. As part and parcel of that proposal the wife also said that the husband should bear the costs of the suit. It is not clear why she did this save that her legal aid certificate did rather unusually also include reference to filing an Answer and cross petition. Consequently, her solicitors may have been under the impression that they were obliged to seek an order for the costs of the suit. This was also reiterated in their subsequent letter of the 11 December 2018.     

Decision

10.  Having considered all of the aforementioned factors it seems to me that the litigation conduct of both sides has, on occasions, been somewhat questionable. Given that it seems to me that the most appropriate order is that there shall be no order as to costs. I have considered ordering that the wife do pay the husband’s costs either from the 15 August, when it became clear that the wife was seeking the costs of the suit, or from the 29 March when the matter was resolved save for the issue of costs. However, given the wife’s legal aid certificate I have decided not to take this path. 

Order

11.  Consequently I shall exercise my discretion and make an order that there be no order as to costs with respect to the consent summons dated the 26 March 2019, save that the Respondent’s own costs shall be taxed in accordance with Legal Aid regulations.